The Funchal City Council has approved a proposal to double the tourist tax, increasing the charge per overnight stay from two to four euros. This measure is expected to take effect in January and is now open for public discussion.
The PTP party reacted to the decision, expressing concern that the increase could make Funchal less competitive and impact tourist demand. The party points out that a family of four on a week-long stay could pay over 100 euros more.
Recent studies indicate that the impact of tourist taxes on a destination's competitiveness varies, depending on factors such as the tax amount, tourist price sensitivity, and how revenues are used. Research on the Canary Islands suggested that even a tax of four euros per person per night would lead to a potential decrease in demand of less than 5%.
